Russian gas giant Gazprom suspended all gas supplies to Bulgaria and Poland on Wednesday, raising the risk of shortages in Central and Eastern Europe, but also across the European continent.
AFP takes stock of the situation in the gas market in connection with the Russian invasion of Ukraine.
Why did Moscow stop gas supplies to European countries?
After imposing sanctions on Russia over its invasion of Ukraine, the Kremlin had warned EU countries that unless they paid in rubles, their gas supplies would be cut off.
Moscow clarified that the gas price would continue to be denominated in the currency of the current contracts, most often in euros or dollars, but that customers would now have to conduct a foreign exchange transaction in Russia.
“The terms laid down are part of a new payment method developed after unprecedented acts of unkindness.”said Kremlin spokesman Dmitry Peskov on Wednesday.
A number of countries, including France, Germany and Poland, had already answered “never”.
According to Claudia Kemfert, energy expert at the German Institute for Economic Research (DIW Berlin), “Stopping gas supplies from Russia to Poland and Bulgaria is the next step in Putin’s escalation to panic Europe.”
However, she felt “Supply problems are not to be expected at the moment, since Germany and Europe are sufficiently supplied with gas”.
How important is Russia in the European gas market?
In 2021, according to the IEA, Russia supplied 32% of the total gas needs in the European Union and the United Kingdom, compared to 25% in 2009, but the situation varies greatly by country.
While Finland is 97.6% dependent on Russian gas (in 2020) according to Eurostat, the three Baltic countries of Lithuania, Latvia and Estonia announced in early April that they had stopped importing Russian gas, and at that time on their electricity include gas reserves, stored underground.
Bulgaria is affected by the disruption in Russian gas supplies and is about 85% dependent on it, as is Slovakia.
Germany remains dependent with a share of 55%, but according to the Federal Ministry for Economic Affairs and Climate “the security of supply in Germany is currently guaranteed”.
How important is Europe in Moscow’s gas revenues?
At current market prices, the value of Russian gas exports to the EU alone is $400 million a day, according to the International Energy Agency (IEA).
According to Gazprom Export’s website, 68% of the Russian giant’s gas exports went to Europe in 2020.
Of the total exports of 174.9 billion m³, 119.35 billion m³ went to Europe, of which almost 49 billion m³ went to Germany alone, almost 21 billion m³ to Italy and more than 13 billion m³ to Austria.
The AIE emphasizes this for its part “Receipts from gas and oil exports accounted for 45% of Russia’s federal budget in January 2022”.
Poland feels “independent”
Poland, which consumes up to 21 bcm of gas a year, says it is “ready to accept even the complete cut” of Russian gas. According to the head of government.
Poland, which itself produces around 4.5 billion m³ of gas, already has an LNG terminal with a current transport capacity of 6.5 billion m³ of gas, which is soon to be expanded to 8 billion m³.
According to the Polish government, gas reserves are 76% full and Poland has gas interconnections with all its neighbors. Above all, the country expects the start of the gas pipeline Baltic Pipe in October, which can transport up to 10 billion m³ of Norwegian gas.
“We will make it even if this gun is pointed at our head”said Prime Minister Mateusz Morawiecki on Wednesday.